MR NILESH BHARANI, MUMBAI V. DCIT CC 4(1), MUMBAI

ITA 612/MUM/2020

AI Insights

The case involves Mr. Nilesh Bharani, who appealed against the assessment order passed by the Deputy Commissioner of Income Tax, Central Circle 4(1), Mumbai. The assessment was based on a notice issued under section 148 of the Income Tax Act, 1961, following a search and seizure operation. The primary legal contention was the incorrect application of jurisdiction and the legal provisions under which the reassessment was made. The Tribunal examined whether the reassessment should have been conducted under section 153A/153C instead of section 147/148, considering the nature of the income and the procedural requirements following a search operation.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 125100 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-12-2022
• Assessment Year: 2011-2012
• Appeal Filed On: 23-01-2020
• Other Referred Cases: Kanwar Singh Saini vs High Court of Delhi, PCIT vs. S.S. Con Build Pvt. Ltd, Mavany Brothers vs. CIT, Sinhgad Technical Education Society vs. ACIT, CIT vs. Indian Molasses Co. (P) Ltd., ITO vs. Shrilekha Business Consultancy (P.) Ltd., Ballarpur Industries Ltd vs. CIT, UAL Industries Ltd vs. CIT, CIT vs. Shodiman Investments (P) Ltd, ACIT vs. Pankajbhai Jaysukhlal Shah
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources; Search and seizure; Document seized; Opportunity of being heard; Period of limitation; Deemed to accrue or arise in india; Wrong claim; Assessment record; Benefit of exemption; Reason to believe; Documents seized; Reassessment proceedings; Set aside; Capital Gains
• Section: 147; 68; 132; 153A; 133(6); 143(1); 292BB; 158BC; 153; 119; 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI BEFORE SHRI AMIT SHUKLA, JM, & SHRI AMARJIT SINGH, AM आयकरअपीलसं./ I.T.A. No. 612/Mum/2020 (निर्धारणवर्ा / Assessment Year: 2011-12) Mr. Nilesh Bharani 5, Sharda Sadan S.G. Marg, Dadar(E), Mumbai- 400014 बिधम/ Vs. DCIT CC - 4(1) Mumbai Air India Building, Nariman Point, Mumbai 400021 स्थायीलेखासं./जीआइआरसं./PAN No. AABPB4581G (अपीलाथी/Appellant) : (प्रत्यथी / Respondent) अपीलाथीकीओरसे/ Appellant by : Shri Vinod Kumar/Satish Gupta प्रत्यथीकीओरसे/Respondent by : Shri Murli Mohan सुनवाईकीतारीख/ Date of Hearing : 02.12.2022 घोषणाकीतारीख / Date of Pronouncement : 28.02.2023 आदेश / O R D E R Per Amit Shukla, Judicial Member: The aforesaid appeal has been filed by the Assessee against order dated 28.11.2019, passed by Ld. CIT(A), for the quantum of 2 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani assessment passed u/s 147/143(3) for the AY 2011-12 dated 30.11.2018. 2. In various grounds of appeal assessee has taken various legal grounds as well as various additions on merits, which are summarized as under:  The first legal ground relates to validity of re-opening u/s 147 and 148.  Secondly, Assessee has challenged the jurisdiction of the Assessing Officer who has passed the impugned order on the ground that he did not have jurisdiction over Assessee.  Thirdly, the additions which have made in the assessment passed u/s 147 could not have been made as cannot be made as same should have been made in the order passed u/s 153A, and  Lastly, in respect of one addition of Rs. 56,86,529/- on account of alleged bogus claimed of long term capital gain the same should have been considered u/s 153C and not u/s 147 as per the provisions of the law. 3 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani 3. Besides this Assessee has challenged following additions on merits: i. Addition of Rs. 75,74,28,000/- for alleged cash loans given by the assessee but added u/s 68 based on some dumb documents at the time of search. ii. Addition of Rs. 56,86,529/- u/s 68 by treating long term capital gain on sale of shares as bogus. iii. Addition of Rs. 7,72,56,840/- on estimate basis of re- characterizing the addition as undisclosed interest income. iv. Addition of Rs. 2,84,326/- u/s 69 C for alleged commission at the rate of 5% paid for bogus long term capital gain. 4. The background of the case in brief are that, here in this case the original return of income was filed by the assessee on 19/09/2011 at an assessable income of Rs. 25,01,840/- and which was processed u/s 143(1) of the Act. No assessment order u/s 143(3) of the Act was passed for this assessment year. As per available information on record, a search and seizure action u/s 132(1) was carried out at the place of the assessee on 06- 07/10/2017 and the consequently panchnama in the case of the 4 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani assessee after the search was drawn on 12/10/2017. Thereafter, assessment orders for the six AYs 2012-13 to AY 2017-18 were passed u/s 153A of the Act on 31/12/2019 in consequence to the search on the assessee. 5. Before the commencement of proceeding u/s 153A, a notice u/s 148 of the Act was issued by the ITO, Ward 20(2)(4) Mumbai on 28/03/2018 for this assessment year on the basis of some information was received by him from the DDIT Inv. Unit 5(4) Mumbai after the search on the assessee and in case of M/s Evergreen Enterprises, in which assessee was partner, alleging seizure of some incriminating material and consequential escapement of taxable income of the assessee as is mentioned in the undated reasons recorded placed on record, without mentioning the actual date of receipt of the said information/ material by the ITO. But as per the records it is borne out that it was before 28/03/2018, when the said notice u/s 148 on the basis of the said information was issued to the assessee. However, as brought out on record before us, before completing the assessment by the said ITO Ward 20(2)(4) Mumbai, for this assessment year who had issued the 5 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani notice before the limitation period expiring on 31/12/2018, the assessment jurisdiction over the assessee was transferred by the PCIT-20 Mumbai in pursuance of the income-.tax search on 06- 07/10/2017 on the assessee, to the DCIT Central Circle 4(1) Mumbai vide the assessment jurisdiction transfer order dated 11/09/2018. It has been shown before us that the assessment jurisdiction transfer order transferred the same from the ACIT Circle 20(2) Mumbai and not from the ITO Ward 20 (2) (4) Mumbai who had earlier issued the notice u/s 148 of the Act. The ITO Ward 20(2)(4) Mumbai had jurisdiction over the assessee as per the CBDT circular no. 1/2011 dated 31/01/2011 as the latest, four returns of taxable income for the AY 2013-14 (at Rs 10,61,190/-); AY 2014-15 (at Rs 15,28,140/-); AY 2015-16 (at Rs 15,03,060/-); and for the last AY 2016-17 (at Rs 18,97,820/-), as no return of income for the AY 2017-18 had been filed till the date of search which was filed belatedly on 11/02/2019, which was filed also at Rs 11,85,530/-. Accordingly, it was stated before us that, since all the returns of income as above had taxable incomes lower than Rs 20 lakhs and accordingly, the ITO Ward 20(2)(4) Mumbai was holding the assessment jurisdiction on the assessee as the returned income for 6 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani all the above assessment years was less than Rs 20 lakhs being in the metro cities in view of the above instructions of the CBDT defining the assessment jurisdiction between an ITO and ACIT. 6. The reasons for reopening were provided by the DCIT, Central Circle 4(1) Mumbai to the assessee on his request on 22/11/2018. The assessee filed objections to the same before the DCIT Circle 4(1) Mumbai on 05/12/2018. The said AO disposed off the said objections vide letter dated 07/12/2018 stating that ―though the undersigned is not technically bound to pass a speaking order, yet the same are rebutted as under‖. 7. We heard, both the parties at length, Mr. Vinod Kumar, on behalf of the Assessee and the ld. CIT DR, Mr. Murli Mohan, on behalf of the Revenue, who also replied to the queries raised from time to time by the Bench seeking many clarifications on the arguments presented during the course of hearing. Since, the grounds taken by the assessee are on law and also on merits; it was decided by the Bench to first to take up legal grounds.. Since, all the legal grounds taken by the assessee go to the root of the jurisdiction, therefore, are being considered first. 7 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani 8. As stated above, the assessee has raised three issues in his respect of the legal ground: (i) The first plea of the assessee is that the assessment order passed u/s 147 of the Act by issuing a notice u/s 148 of the Act on 28/03/2018 is bad in law and void ab initio as the assessee had already been searched by the income-tax department on 06- 07/10/2017 u/s 132 of the Act before the date of issue of the said notice and which was also issued relying on the information received from the Investigation Unit of the income-tax department based on some incriminating material found and seized during the said search on the assessee. This fact has also been specifically admitted by the AO in the reasons recorded to issue the said notice where specific mention of the alleged incriminating material found during the course of search escaping income of Rs 76,31,06,529/- has been mentioned in para 4 of the reasons, but also of the few statements of some employees recorded u/s 132(4) of the Act has been relied therein. This ground has been taken with respect to the assessment of income of Rs 84,83,10,400/- assessed as per alleged incriminating material found during the course of search. 8 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani (ii) In the second plea, the assessee has challenged, the assessment jurisdiction of the AO, Central Circle-4(1), Mumbai who passed on 30/12/2018 the assessment order u/s 147 of the Act in this appeal assuming jurisdiction in terms of an assessment jurisdiction transfer order passed on 11/09/2018 by the PCIT-20, Mumbai transferring the assessment jurisdiction over the assessee to ACIT Central Circle 4(1) Mumbai from the ACIT, Circle-20(2), Mumbai whereas as per the assessee the same was not and could also not be with the ACIT, Circle-20(2), Mumbai but was correctly with the ITO, Ward-20(2)(4), Mumbai in terms of the Instruction no. 1/2011 dated 31/01/2011 issued by the CBDT u/s 119 of the Act assigning the assessment jurisdiction u/s 120 of the Act as per the monetary limits and on facts which was binding on the Revenue authorities under all circumstances. Therefore, as per the assessee the assessment order in this appeal is void ab initio having been passed by an AO not having a legal assessment jurisdiction at all. (iii) Lastly, in respect of the addition of Rs 56,86,529/- made alleging bogus claim of a long term capital gain, the contention of the assessee is that the same could only be considered for 9 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani reassessment by taking recourse to the non obstante provisions of the section 153C of the Act as has been mandated w.e.f. 01/06/2015 and not by taking recourse to the provisions u/s 148 of the Act because the entire information relied therein had emanated in the income-tax searches in the premises of the share brokers / operators of the scrip on which the said LTCG was earned by the assessee as no incriminating material in any manner for the same was detected in the search in the premises of the assessee. 9. At the outset, the Assessee has challenged the validity of the assessment order passed by the DCIT Central Circle 4(1) Mumbai u/s 147 of the Act as against the correct assessment jurisdiction to assess the same u/s 153A of the Act after the search in his premises. It was submitted on behalf of the assessee that, since this is the jurisdictional issue and goes to the root of the validity of the assessment order, therefore, it can be raised at any stage. We agree that this is purely a legal issue and is arising out of facts and material on record, therefore, same is admitted for 10 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani adjudication. 10. Here in this case, a search and seizure action u/s 132 of the Act was carried out on 06-07/10/2017 in the case of the assessee. Thus, according to the assessee, once the search has taken place the AO had to mandatorily and legally acquire jurisdiction to invoke and proceed under section 153A of the Act and he has no choice under the law. The ld. AR stated that after the amendments made by the Finance Act, 2017 w.e.f.01/04/2017 in the said section, the numbers of assessment years covered by the said section 153A of the Act were extended to 10 years subject to some stipulations and conditions and not just remained confined to only six assessment years before the date of search as earlier, but also extended to further 4 „relevant assessment years‟ which term is defined in the Explanation 1 to the Fourth Proviso u/s 153A of the Act. As the search was conducted on 06-07/10/2017, and this being A.Y. 2011-12, definitely fell within this stipulated period of ten assessment years, i.e., within the extended 4 relevant years as defined therein. The issue for consideration is, whether the conditions laid down in fourth proviso to section 153A (1) read with 11 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani Explanation 2, are satisfied so as to rope in any assessment year within the extended 4 years. The entire case of the revenue and the basis for issuing the notice u/s 148 on 28/03/2018 is based upon the claim that the material collected during the searches from M/s Evergreen Enterprises and assessee established that the assessee had been advancing cash loans to various individuals and concerns which are in nature of undisclosed investment vis a vis his income-tax return and some of these loans were outstanding as on the 31/03/2011. Thus, the revenue on the basis of the said seized documents/ statements worked out total alleged escaped income of the assessee is at Rs. 85 crores approx. and therefore, the issue under consideration here is whether it is covered by the Fourth and the Second Provisos of the Section 153A of the Act. 11. In line of the aforesaid plea taken by the Ld. AR, we have to examine as to whether the conditions laid down in the 4 th and 2 nd proviso of section 153A are satisfied and to see, whether the assessment should have been framed u/s 153A or u/s 147/148. The reasons recorded by the AO wherein he has referred to 12 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani various information during the course of search and seizure carried out in the case of M/s Evergreen Enterprises, wherein assessee is one of the partner and it was found that assessee has taken some accommodation entry of bogus /long term capital gains on sale shares of M/s DB International during F.Y 2010-11 and various persons have taken loan from the assessee and M/s Evergreen Enterprises. The reasons recorded by the AO reads as under:- Reasons for reopening of the assessment in case of Nilesh Bharani (PAR- AABPB4581G for AY 2011-12 u/s. 147 of the Act 1. The assessee derives income from salary and business. The assessee has been filing his returns of income from A.Y. 2002-03. The assessee, has filed Return of Income for the A.Y: 2011-12 on 19/09/2011 declaring total income of Rs.25,01,840/- in the Individual capacity. The ROI was processed u/s 143(1) of the 1.T. Act, 1961 on 25/09/2012. The case was not selected for scrutiny for the A.Y. 2011-12. 2. In this case, information has been received from the Deputy Directorate of Investigation, Unit-5(4), Mumbai that during the course of search and seizure action u/s.132 was carried out in the case of M/s. Evergreen Enterprises wherein assessee is one of the partner. The assessee has taken 13 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani accommodation entries of bogus LTCG through sale of penny stocks viz. M/s. D. B International during FY.2010-11 relevant to A.Y.2011-12 and have claimed benefit of exemption u/s 10(38) of the IT Act, 1961. As per the information, Shri Nilesh Bharani (PAN AABPB4581G), is .assessed to tax in this charge and is one of the beneficiary who has also availed of such bogus/accommodation entry. From the information received from Deputy Directorate of Investigation, Unit-5(4), Mumbai, it is seen that an amount of Rs.56,86,529/- has been reflected under the head of Penny Stock transaction for the year under consideration. 3. Further, information has also been received that Shri Jagdish T. Ramani, Ashwin Rathod, Vibha Sachin Rawate and Shankar Jadhav (employees Evergreen Enterprises) several individuals and business concerns who have borrowed cash loans from /through M/s. Evergreen Enterprises are identified. One of the individuals/business concerns who has borrowed cash loan from/through Nilesh Bharani/Evergreen Enterprises is mentioned below: Code Name Coded amount as per Ledger (in 000) Actual amount (in Rs.) F.Y B.B./B.BR O./B.INV. B.B./B.BRO. /E.INV 757420 757420000 2010-11 After verification of the materials available on record. It is ascertain, that this is enough reason to believe that assessee has 14 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani not shown or offered income to tax in her R.O.I filed for 2011-12. The assessee has clearly failed to disclose all material facts for determination of income. Assessee also failed to voluntary disclosed the information before the Assessing Officer any time, after filing the return of income. In fact, it is a clear cut case to the assessee seems to have fabricated the evidence in order to mislead the revenue to believe the apparent as real and underestimated the total income by Rs.76,31.06,529/- 5. Accordingly, from the above facts and information in possession with this office it is understood that the said income of Rs.76,31,06,529/- has escaped assessment within the meaning of section 147 of the 1.T.Act, 1961 for the previous year relevant to AY 2011-12. 6. In view of the above facts and information in possession with this office, there is failure on the part of the assessee to disclose fully and truly all material facts in respect of income of Rs.76,31,06,529/- Therefore, I have reason to believe that income chargeable to tax of Rs.76,31,06,529/- and has escaped assessment within the meaning of section 147 of the IT. Act, 1961 for the failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment for the previous year relevant to A.Y 2011-12 Hence, it is a fit case for initiation of proceedings u/s.147 of the Income Tax Act. 1961 by issuing notice u/s. 148 of the Income Tax Act, 1961. 7. In this case more than four years have lapsed from the end of 15 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani assessment year under consideration. The case is put up before the Pr. CIT.-20, Mumbai for his kind sanction to issue notice u/s 148 in the light of proviso to sub-section 1 of section 151 of 1.T. Act, 1961. (NEELAM V. KORGAONKA) Income tax Officer-20(2)(4), Mumbai. 12. From the aforesaid reasons, it can be seen that, the AO has noted that based on search and seizure action in the case of M/s Evergreen Enterprises and materials on record had come to reason to believe that, firstly, assessee has taken bogus /LTCG in a penny stock; and secondly, various individual and business concerns have borrowed cash loans through M/s Evergreen Enterprises and through Nilesh Bharani (assessee) which is from undisclosed income which has escaped income aggregating to Rs. 76,31,06,529/-. Ergo, according to the AO, the investment in shares and sale thereof is income escaping assessment; and giving of huge cash loans to various persons are out of undisclosed sources which has escaped assessment. The 4 th proviso of section 153A provides that, no notice for assessment or re-assessment shall be issued by the AO for the relevant assessment year or years, unless the AO is in his possession books of accounts or 16 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani other documents or evidence which reveal that the income represent in the form of “asset” which has escaped assessment amounts to or is likely to amount to Rs. 50 lakhs or more. The Explanation 2 below the 4 th proviso states that “asset” shall include immovable property being land or building or both, shares and securities, loans and advances, deposits in bank accounts. Now whether, investment in alleged penny stock and sale thereof as well as giving of cash loans to various persons treating it as out of undisclosed investment falls in the category of “asset”. 13. The ld. AR, before us pleaded that considering these facts and the provisions of the section153A of the Act being a non obstante provision, w.e.f. 01/04/2017, the Assessing Officer had no option but to make the reassessment of income only u/s 153A of the Act, since AY 2011-12 fell within the period covered under the extended relevant 4 assessment year (beyond the six A.Ys. before the date of search), therefore, AO could not have passed the assessment order u/s 147 of the Act in contravention of the express provisions of the 153A of the Act. Thus, patently, invoking of provisions of the section 148 of the Act and consequently, the 17 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani impugned reassessment order is bad in law ab initio, being against the express provisions of the Act. In support he relied on the judgment of the Hon‟ble Apex Court in Kanwar Singh Saini vs High Court of Delhi (2012) 4 SCC 307 to support the above contention where in para 13, Hon‟ble Court observed and held as under: “13. There can be no dispute regarding the settled legal proposition that conferment of jurisdiction is a legislative function and it can neither be conferred with the consent of the parties nor by a superior court, and if the court passes order/decree having no jurisdiction over the matter, it would amount to a nullity as the matter goes to the roots of the cause. Such an issue can be raised at any belated stage of the proceedings including in appeal or execution. The finding of a court or tribunal becomes irrelevant and unenforceable/inexecutable once the forum is found to have no jurisdiction. Acquiescence of a party equally should not be permitted to defeat the legislative animation. The court cannot derive jurisdiction apart from the statute. 14. Ld. A.R. pointed out that, The Hon‟ble Delhi High Court in PCIT vs. S.S. Con Build Pvt. Ltd 2022-TIOL-656-HC-DEL-IT, following the above judgment of the Hon‟ble Apex Court and again 18 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani jurisdictional Bombay High Court in Mavany Brothers vs. CIT 2015 SCC Online Bombay 1686/ (2015) 62 taxmann.com 50 (Bom), held an identical view as above. Thus, in view of this specific direction / order of the Hon‟ble Apex Court and the High Courts, the impugned reassessment proceedings are meaningless due to an invalid and illegal jurisdiction assumed by the AO in complete violation of the specific law for the purpose. 15. To appreciate the legal issue raised before us, we shall discuss the position of law in section 153A of the Act as has been amended in the statute w.e.f. 01/04/2017 and whether, under the facts and circumstances of the case the assessment could at all have been passed u/s 148 or u/s 153A. The section reads as under: Assessment in case of search or requisition. 153A. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003 but on or before the 31st day of March, 2021, the Assessing Officer shall— 19 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years and for the relevant assessment year or years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and for the relevant assessment year or years: Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years and for the relevant assessment year or years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years and for the relevant assessment year or years referred to in this sub-section pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate: 20 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani Provided also that the Central Government may by rules made by it and published in the Official Gazette (except in cases where any assessment or reassessment has abated under the second proviso), specify the class or classes of cases in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years: Provided also that no notice for assessment or reassessment shall be issued by the Assessing Officer for the relevant assessment year or years unless— (a) the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year or in aggregate in the relevant assessment years; (b) the income referred to in clause (a) or part thereof has escaped assessment for such year or years; and (c) the search under section 132 is initiated or requisition under section 132A is made on or after the 1st day of April, 2017. Explanation 1.—For the purposes of this sub-section, the expression "relevant assessment year" shall mean an 21 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is made. Explanation 2.—For the purposes of the fourth proviso, "asset" shall include immovable property being land or building or both, shares and securities, loans and advances, deposits in bank account. (2) If any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Principal Commissioner or Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside. Explanation.—For the removal of doubts, it is hereby declared that,— (i) save as otherwise provided in this section, section 153B and section 153C, all other provisions of this Act shall apply to the 22 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani assessment made under this section; (ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year. 16. Thus, from a bare perusal of this provision, it is clear that, where a search is initiated on or after 01/04/2017, and the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income, represented in the form of asset, which has escaped assessment amounts to or is likely the alleged to Rs 50 lakhs or more, the AO should make assessment u/s 153A of the Act. The catch point is that in cases where tangible evidences are found during search and seizure operation and the same is represented in the form of undisclosed investment in any “asset”, as defined in the Explanation 2 therein, in respect of the extended 4 relevant assessment years, the assessment would be exclusively covered by the Fourth Proviso to the Section 153A (1) of the Act and no notice for reassessment can be issued u/s 148. Now on the facts of the present case, it is seen that the evidences found during the course of search and seizure operation in the case of the assessee and M/s Evergreen 23 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani Enterprises, wherein assessee was a partner that they have been giving cash loans to various persons for sums more than Rs. 75.74 crores. This cash loan is allegedly out of undisclosed investment or money. Giving of cash loans is certainly an asset within the meaning of Explanation 2 as incorporated above and is represented in the form of undisclosed investment in an asset which reveals undisclosed income escaping assessment. Even in the assessment order has held that assessee has given cash loans based on some entries in diary and documents. In any case, what is material as of now is the evidence which has been referred in the reasons, which was giving of cash loan and not receiving of cash loan and investment and sale of shares which was by way of alleged accommodation entry in the form of sale of an asset, i.e., shares as bogus LTCG. It has been thus submitted before us in light of these facts that the AO has erred in law in passing the impugned assessment order u/s 147 of the Act for the AY 2011- 12, which definitely fell within the extended period of 4 relevant assessment years beyond the six assessment years before the date of search. Neither, the assessee nor the AO had any discretion even by consent in this regard being the jurisdictional matter, 24 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani because language of the law is clear and unambiguously worded. It is injudicious that the AO failed to act upon according to the law. 17. We also note that the said additional provisions regarding the relevant assessment year(s) were inserted by the Finance Act, 2017, w.e.f. 01/04/2017. Prior to the enactment of the Finance Act 2017; the period covered by the sections 153A/153C and 148 of the Act was limited to the six assessment years only. Not only that, both the sections 153A/153C of the Act overrides sections 147/148 of the Act and therefore, is to be mandatorily followed by the revenue with no option to choose any other provisions. 18. It is equally trite law that the special provisions always prevail over the general provisions which cannot be resorted to make a thing or act apparently permissible which is otherwise impermissible under the special provisions. A reference can be made to legal maxim and rule of construction relevant to the present issue is expressed in the maxim "generalia specialibus non derogant" meaning where there is a conflict between a 25 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani general or special provision, the latter shall prevail as has been pronounced in Forbes Campbell & Co. Ltd. v. CIT (1994) 206 ITR 495 (Bom). The Hon‟ble Supreme Court after considering gamut of the judicial pronouncements in CTO vs Binani Cement Ltd. & Anr on 19 February, 2014- CIVIL APPEAL NO.336 OF 2003, Union of India & Anr. vs. Indian Fisheries (P) Ltd. (1965) 57 ITR 331,334 (SC), CIT v. Indian Molasses Co. (P) Ltd. (1989) 176 ITR 473 (Cal), ITO vs. Shrilekha Business Consultancy (P.) Ltd. [2020] 121 taxmann.com 150 (Hyderabad - Trib.), Ballarpur Industries Ltd 398 ITR 145 (Bombay), UAL Industries Ltd [2013] 31 taxmann.com 111 (Kolkata - Trib.) (TM) approved the said law. 19. We further opine that the same legal position would also be applicable u/s 153C of the Act as well and wherever the AO of the searched person handed over the seized material to the AO of the „other person‟, then that AO of the „other person‟ is mandatorily required to issue notices u/s 153C of the Act for the ten (six plus four extended) assessment years subject to finding of definite incriminating material disclosing escaped income which pertains 26 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani to or any information contained therein has bearing on determination of assessable income of such other person for any of those 10 assessment years. Accordingly, the notices u/s 153C of the Act for the first six assessment years can be issued only on the basis of some seized incriminating books pertaining to or information contained therein, but for the earlier 7th to 10th extended relevant assessment years, the condition of any escaped income being minimum of Rs 50 lakhs and that too when such income is represented in the form of an asset must also be met. 20. Now coming to the present facts, it has been pointed out by the ld. AR that, in para 4 of the reasons recorded on 28/03/2018, the AO has categorically held that after verification of the material available on record, it is certain that there is enough reason to believe that the assessee has not shown or offered this income (as mentioned in para 2 and 3 therein) to tax in her ROI filed for the AY 2011-12, (though the assessee is a male). However, undisputedly verification of the material available on record by the AO is an affirmative averment by the AO and the contention of the revenue that the AO did not have any material on its record as on 27 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani the date of issue of the said notice u/s 148 of the Act, then the question arises, what verification was done by the AO in absence of the seized material vis a vis the reasons recorded, which was based purely on the seized material and where the amounts mentioned were picked up by the AO from the seized material only and nowhere else. This has not at all been answered by the revenue. If the AO did not have the relevant information on her record at that time, then no verification at all was done by the AO and the impugned reasons recorded, ostensibly were without any basis and cannot at all be proceeded with in any manner, even under section 147, as law mandates that there has to be tangible material before the AO and independent application of mind on such material. 21. The Ld. A.R. also stated that to apply the provisions of the Fourth proviso u/s 153A of the Act, it was not necessary that the AO of the searched assessee should be in possession of the books of account but for its application, it is sufficient that if the AO has in his possession any ―documents or evidence which reveal that the income, represented in the form of asset, which has escaped 28 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani assessment amounts to or is likely to amount to fifty lakh rupees‖. Thus, as per the AR, it is not necessary that the same could only be initiated when the seized books of account were in possession of the AO. The legislature in its worthy wisdom, by way of the jurisdictional aspect, has placed word “OR” at many places therein. Any of the evidence mandated application of the said provision leaves no option with the revenue or even the courts or the parties to the lis to choose as per their respective own whims as has been held by the Hon‟ble Apex Court in Kanwar Singh Saini (supra). He submitted that, it is an admitted fact that the AO had evidence gathered from the search, then suspecting/ detecting the escaped income of more than Rs 50 lakhs at the time of issue of the notice u/s 148 of the Act on 28/03/2018, for initiating the proceedings on the basis of same very evidence coupled with the statements recorded u/s 132(4) of the Act, which are also mentioned in the reasons recorded. 22. The ld. AR also drew our attention to the Fourth Proviso to 153A of the Act and pointed out that it does not at all refer to any seized material for initiating a reassessment proceeding for the 29 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani relevant extended 4 years. It just refers to information /material which suggest which reveals income in the form of an „asset‟ which has escaped assessment of income of Rs 50 lakhs and more for the said extended period. This could be either books of account or documents or evidence in any manner, not necessary seized from the assessee but should be with the AO in some manner which could be a document by way of a report sent by the investigation unit also. He also stated that there is a difference of application of the two non obstante sections 153A and 153C of the Act after the search. The section 153A of the Act applies irrespective of any incriminating material found during the search and an assessment therein of the searched person is must, which included the extended period of 4 relevant AYs also but that in case only, when any document or evidence or books of account disclosing the same represented by an asset of Rs 50 lakhs or more, was with the AO. However, the section 153C of the Act could be applied only and only if there was any incriminating material found during a third-party search about the undisclosed income. 30 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani 23. The ld. AR also averred that thus, undisputedly, the AO of the assessee had the complete information of the search and the material found therein from the assessee not only at the time of completion of assessment as has been admitted in the letter dated 15/11/2022 filed by the CIT DR during the hearing of the appellate proceedings, but also at the time of recording of the reasons u/s 148 of the Act as has been admitted by the AO in the reasons of having knowledge of the fact of the search on the assessee. 24. The ld. AR also stated even if hypothetically, it is presumed that no such material was there on the record of the AO at the time of recording those reasons, despite that the AO mentioned its existence on his record, then the reasons were recorded without verification of the facts and the same tantamount to borrowed satisfaction and is therefore, void ab initio as has been held in PCIT v Dharamvir Singh Rao 2017-TIOL-431-SC-IT (SC) and the Hon‟ble Delhi High Court in 2017-TIOL-2447-HC-DEL-IT and upheld by the Hon‟ble jurisdictional Bombay High Court in PCIT vs Shodiman Investments (P) Ltd in ITA No. 1297 of 2015 [DoJ: 16/04/2018]. 31 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani 25. The ld. AR also stated that importantly all the additions made in the impugned assessment order, specific reference is only to the search undertaken in the premises of the assessee and nowhere else and the material found therein. He further submitted that, on perusal of the section 153A of the Act, it is clear that the same does not at all get triggered on receipt of any information by the AO but the heading to the section itself confers and mandatorily transfers the assessment jurisdiction after a search to be completed u/s 153A of the Act by overriding other assessment provisions and it is mandatory for the AO to issue a notice to the searched person for the six assessment years before the date of search and for the relevant 4 assessment year or years being part of the extended four assessment years beyond the mandatory preceding six assessment years from the date of search if the prescribed conditions there in are fulfilled and then to assess the income based on those fresh returns of income and the material available with him. The second proviso therein specifically states that any assessment or re-assessment of income for any of the assessment year out of the said 10 assessment years pending on the date of search shall compulsorily abate. It is because after the 32 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani search, a reassessment could only be made u/s 153A of the Act for the 10 assessment years preceding the date of search and not under any other section. The ld. AR also vehemently stressed the importance of the same by referring to the Hon‟ble Apex Court in Sinhgard Technical Education Society 2017-TIOL-309-SC-IT holding that an assessment after a search is a jurisdictional fact and which can only be derived from the legislature and not by the courts or even the parties by consent as has been held by the Hon‟ble Apex Court in Kanwar Singh Saini (2012) 4 SCC 307. 26. It was also stated by the ld. A.R. by referring to the relevant sections legislated for the purpose that no time limit has been prescribed by the statute anywhere to issue a notice u/s 153A of the Act requiring the person searched to furnish the return of income therein for assessment / reassessment as is prescribed for issuing a notice u/s 148 of the Act. The limitation stipulated by the legislature is only for the time by which the said assessment u/s 153A of the Act must be completed. Thus, as per the ld. AR, the AO is well within legal jurisdiction to issue such notice(s) for the 6 assessment years preceding the date of search and for any of 33 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani the extended 4 relevant assessment years beyond those 6 assessment years separately as soon as the AO receives the requisite information of the search having taken place and for escaped income of Rs 50 lakhs and above represented by an asset in the extended 4 years which here, the AO herself mentioned in the reasons recorded to initiate the reassessment proceedings by issuing a notice u/s 148 of the Act and proves that the AO had got the said evidence and necessary documents by the said date. 27. Accordingly, the ld. AR submitted that it is not at all important to peruse the date as to when the AO received the alleged seized material from the investigation wing of the department for the purpose of initiating the reassessment proceedings u/s 153A of the Act but what is important to appreciate by the AO that a search had already taken place by the time the AO proposes any reassessment proceedings. The legislature had in its wisdom crafted the mandatory jurisdiction after a search to make an assessment of income mandatorily u/s 153A of the Act by tying not only the hands of the AO and the assessee but also of all the appellate courts upto the Hon‟ble Apex 34 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani Court. He further submitted that the assessment proceeding for this assessment year otherwise was also pending as on the date of receipt of the seized books of account on 31/10/2018 as has been contended by the revenue during the hearing of this appeal. He stated that the assessment procedure u/s 153A of the Act is a jurisdictional aspect, and no written order is required from the AO for the purpose of continuing assessment u/s 148 of the Act which otherwise stood automatically abated and the AO loses the jurisdiction to pass any assessment order in respect of the same after the search on the assessee except only u/s 153A of the Act. 28. The AR also supported the above submissions because on query from the Bench during the hearing as to when the books of account seized from the assessee by the investigation wing during the said search were handed over to the Central Circle Mumbai, the CIT DR filed a letter dated 15/11/2022 with evidence showing that the same was handed over on 31/10/2018 to the ACIT Central Circle 4(1) Mumbai by the Investigation Wing and a copy of which was also given to the assessee then. Thus, undisputedly, and as per the categorical admission of the revenue as above, the 35 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani seized material of the assessee for this relevant assessment year was received by the AO, DCIT, CC 4(1) Mumbai before the date of completion of this assessment vide the assessment order dated 30/12/2018. The ld. AR further pointed out that admittedly, the AO has admitted in the reasons recorded by 28/03/2018 that the information received by him from the Investigation Unit was based on a search on the assessee where complete figures and seized information was duly mentioned besides referring to the statements of 4 employees of the assessee, recorded u/s 132(4) of the Act at that time of search and reliance was also placed on those statements in the said reasons. Thus, the ld. AR emphasizes on the fact of not only a search having taken place on the assessee before the date of issue of the said notice u/s 148 of the Act but definite evidence in respect of the alleged escaped income being Rs 50 lakh and above as is mentioned in the said reason was very well known to the AO then. Thus, he pleaded that in view of the above settled and unambiguous law that the revenue officers or even otherwise the courts, can assume jurisdiction only as per the legislative mandate and not by convenience or whims including by consent of the parties to the lis, the impugned assessment order 36 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani passed u/s 147 of the Act instead u/s 153A of the Act is void ab initio and must be accordingly declared. Second Legal Objection taken by the assessee on the jurisdiction of the AO who passed the impugned assessment order. 29. The ld. AR, further, challenged the assessment order in appeal as bad in law and void ab initio, as having been passed without the competent jurisdiction by the DCIT Circle 4(1) Mumbai as the said A.O. never had any valid and legal assessment jurisdiction over the assessee in any manner as no legal and valid assessment jurisdiction transfer order u/s 127(2) of the Act was ever passed by the PCIT 20 Mumbai to transfer the same from the earlier correct Assessing Officer, ITO Ward 20(2)(4) Mumbai, but which was transferred from some other officer being the ACIT Circle 20(2) Mumbai who never had any valid and legal assessment jurisdiction over the assessee to pass any assessment order as is evident from the reply dated 10/06/2022 furnished by the ld. CIT DR during the appellate proceedings before the Hon‟ble ITAT with a copy to the assessee as well. 37 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani 30. The ld. AR, thus, advanced his submissions that as per the said assessment jurisdiction transfer order dated 11/09/2018, passed u/s 127(2) of the Act to transfer the assessment jurisdiction over the assessee, it is undisputedly clear that the same was not from the earlier jurisdictional AO being the ITO Ward 20(2)(4) Mumbai under the charge of the same PCIT 20 Mumbai, but was from the ACIT Circle 20(2) Mumbai to the ACIT Central Circle 4(1) Mumbai who passed the assessment order under this appeal. The assessee was never intimated or even informed even on his request also as how the assessment jurisdiction over him got vested with the ACIT Circle 20(2) Mumbai, when the earlier notice u/s 148 of the Act was issued by the ITO Ward 20(2)(4) Mumbai. No copy of any mandatory assessment jurisdiction transfer order u/s 127(1) of the Act was ever given to the assessee. However, only during the hearing of the appellate proceedings that too on the directions of the Hon‟ble Bench, the ld. CIT DR provided a copy of the Memo dated 20/04/2018 by which the ITO Ward 20(2)(4) Mumbai sent the assessment record for the relevant assessment year to the ACIT 20(2) Mumbai. In the covering letter thereto filed before the Bench, 38 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani the revenue has categorically admitted that no mandatory assessment jurisdiction transfer order u/s 127(1) of the Act was ever passed for the purpose by the PCIT 20 Mumbai but the same was transferred by the ITO suo moto and which is totally illegal, because any assessment jurisdiction from an existing AO can only be transferred to another AO even under the charge of the same PCIT by passing a speaking and reasoned order u/s 127(1) of the Act by the PCIT as per the section 127(1) of the Act. The Ld. A.R. also admitted though there is no necessity at all to give an opportunity of hearing for the same to the assessee yet for the sake of even appreciation, the PCIT may also not pass a reasoned order, yet passing an assessment jurisdiction transfer order u/s 127(1) of the Act is mandatory by the PCIT as no AO can at all suo moto transfer the assessment jurisdiction to another officer even under the same PCIT charge. This is a jurisdictional matter, goes to the root of the assessment proceedings and has to be governed by the legislature as has been held by the Hon‟ble Apex Court (supra). 31. The ld. AR then stated that thus, on perusal of the legal 39 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani provisions as above, the AO Central Circle 4(1) Mumbai while passing the assessment order in this appeal did not possess any valid and legal jurisdiction on the assessee and following the judgment of the Hon‟ble Apex Court in Kanwar Singh Saini (supra), the same must be quashed as void ab initio. The Ld. AR also stated that something can be transferred from one person to the other if and only if the said thing was with the person from whom the same was allegedly ordered to be transferred. He referred to the settled legal rule, Nemo dat quod non habet, literally meaning “no one gives what he doesn‟t have”, sometimes called the nemo dat rule, which states that the purchase of a possession from someone who has no ownership right to it also denies the purchaser any ownership title. It is trite that the buyer cannot acquire a superior title to that of the seller. Since, here the ACIT Circle 20 (4) Mumbai was not at all legally possessing the same as on the date of the said assessment jurisdiction transfer order, the said assessment jurisdiction transfer order passed on 11/09/2018 passed by the PCIT 20 Mumbai transferring the same from the ACIT Circle 20(4) Mumbai was completely illegal and void ab initio which could not at all put into effect the alleged 40 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani assessment jurisdiction transfer in motion to enable the DCIT, Central Circle 4(1) Mumbai to pass the assessment order in this appeal. 32. The ld. AR also submitted that there was no dispute to the fact that the assessment jurisdiction over the assessee at the time of receipt of the alleged information from the investigation wing of the income-tax department was correctly with the ITO Ward 20(2)(4) Mumbai not only because as the PAN of the assessee was with the said ITO as is undisputedly settled from the fact that the Investigation Unit passed on the alleged information on the basis of the PAN location on the web portal of the income-tax department but also because the latest last 4 returns of income were also with him being the net assessable income of the assessee less than Rs 20 lakhs in each assessment year. He drew the attention of the Bench to the acknowledgements of filing those returns of income placed in the PB, where the jurisdiction of the AO is mentioned as of the ITO Ward 20(2)(4) Mumbai which was automatically picked up by the income-tax returns filing software of the income-tax department when the PAN is filled therein. 41 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani Thus, as per him, undisputedly the assessment jurisdiction was correctly lying with the ITO ward 20(2)(4) Mumbai when the impugned reassessment proceeding was initiated on 28/03/2018 by issuing the notice u/s 148 of the Act. 33. It was also pleaded on behalf of the assessee that in case, the revenue pleads that the correct jurisdiction for the purpose was with the ACIT Circle 20(2) Mumbai only at that time then the alleged notice issued u/s 148 of the Act by itself becomes void ab initio as having been issued by a non-jurisdictional assessing officer, i.e., the ITO Ward 20(2)(4) Mumbai and could not at all be proceeded with in any manner. The ld. AR also stated that thus, as per the prevalent income-tax returns filed for the four AYs till the AY 2016-17 and the location of the PAN of the assessee with the ITO, Ward 20(2)(4) Mumbai, as on the date of issuing the said notice u/s 148 of the Act, the correct assessment jurisdiction officer of the assessee was the ITO, Ward 20(2)(4) Mumbai who later on illegally transferred the same voluntarily to the ACIT Circle 20(2) Mumbai by a transfer Memo dated 20/04/2018 which he could not at all have done himself. For this exercise, an order 42 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani u/s 127(1) of the Act by the PCIT was must even if no hearing was to be granted or no reasoned order was to be passed by the PCIT. This could only be transferred under the signature of the PCIT. 34. The ld. AR also relied on a latest judgment of the Hon‟ble Delhi High Court passed on 22/05/2022 in Louis Dreyfus Company Asia Pte. Ltd. vs. CIT (INTL. TAX) (2022) 114 CCH 0132 Del HC where the Hon‟ble Delhi High Court has categorically held that without a proper and legal order u/s 127 of the Act, no jurisdiction can be transferred even if the requisite NOCs have been issued by the respective AOs. The jurisdiction can only be assumed as has been decided by the Legislature and not even by the Courts at their whims. 35. Now for proper appreciation of the law, the provision of the section 127 of the Act reads as under: Power to transfer cases. 127. (1) The Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, 43 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani transfer any case from one or more Assessing Officers subordinate to him (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) also subordinate to him. (2) Where the Assessing Officer or Assessing Officers from whom the case is to be transferred and the Assessing Officer or Assessing Officers to whom the case is to be transferred are not subordinate to the same Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner,— (a) where the Principal Directors General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners to whom such Assessing Officers are subordinate are in agreement, then the Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner from whose jurisdiction the case is to be transferred may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, (b) where the Principal Directors General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners aforesaid are not in agreement, the order transferring the case may, similarly, be passed by the Board or any such Principal Director 44 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner as the Board may, by notification in the Official Gazette, authorize in this behalf. (3) Nothing in sub-section (1) or sub-section (2) shall be deemed to require any such opportunity to be given where the transfer is from any Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place. (4) The transfer of a case under sub-section (1) or sub-section (2) may be made at any stage of the proceedings and shall not render necessary the re-issue of any notice already issued by the Assessing Officer or Assessing Officers from whom the case is transferred. Explanation.—In section 120 and this section, the word "case", in relation to any person whose name is specified in any order or direction issued there under, means all proceedings under this Act in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be commenced after the date of such order or direction in respect of any year. 45 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani 36. Thus, on perusal of the above, sub section (3) u/s 127 of the Act has waived the condition of any personal hearing where the assessment jurisdiction is transferred within the same city, locality or place. But, the said section has not at all waived the condition of a reasoned order to the effect much less an order by the PCIT. Ld. AR also referred to the letter dated 06/06/2022 of the AO filed by the revenue only during the hearing of this appeal, where the said AO herself admitted that no specific order regarding the reasons for transfer of the case record of the assessee from the ITO, Ward- 20(2)(4), Mumbai to the ACIT, Circle-20(2), Mumbai on 20/04/2018 is available in the record. She herself posed a valid question as per the law, to the ITO Ward 20(2)(4) Mumbai seeking clarification if any order was passed by the PCIT 20 Mumbai for change of the jurisdiction of this case from the ITO, Ward-20(2)(4), Mumbai to ACIT, Circle-20(2), Mumbai but no reply was given so far and as per the information available with the assessee, no such reply at all has also been received by the AO Central Circle. 37. Further, the ld. AR also referred to the forwarding memo dated 20/04/2018 given to the appellant, mentioning the reasons 46 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani for transferring the assessment records of the assessee to the ACIT by the ITO as ―Assessed in your charge as per restructuring of jurisdiction‖. The Ld. AR stated that even on query from the Bench to the CIT DR, no explanation as to which restructuring of the jurisdiction was referred to therein be given. As per him, undisputedly, as per the last four returns of income submitted by the assessee, his assessable income in each of the assessment year was lower than Rs 20 lakh and therefore, the assessee could only be assessed with the ITO and not by the ACIT/DCIT as per the instruction no. 1 of 2011 dated 31/01/2011 of the CBDT which was valid till they said date. He also averred that the said transfer memo also clearly indicated that there was no assessment jurisdiction transfer order passed by the PCIT-20, Mumbai for the purpose as was mandatory u/s 127(1) of the Act. 38. The Ld. AR finally concluded his submissions on this issue by stating that thus, on overall perusal of the law as submitted above by him, it is apparent that definitely there was a violation of the said law by the revenue authorities. They were bound to follow the Statute and not to have exercise jurisdiction worked as per their 47 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani sweet will Since, this mandatory legal requirement to assume jurisdiction by the ACIT Circle 20(2) Mumbai whom from the impugned assessment jurisdiction transfer order was passed on 11/09/2018 by the PCIT 20 Mumbai was completely non-existent, any order to transfer the same from the ACIT Circle 20(2) Mumbai to the ACIT, Central Circle 4(1) Mumbai was a nullity ab-initio, because what one does not have, the same cannot be transferred to another from him by any authority. It was necessary for the PCIT 20 Mumbai to transfer the same from the ITO Ward 20(2)(4) Mumbai to the ACIT Central Circle 4(1) Mumbai. Consequently, as per the ld. AR, no valid assessment jurisdiction at all existed with the DCIT Central Circle 4(1) Mumbai who passed the assessment order in this appeal. Therefore, he pleaded that the impugned assessment order must be declared void ab initio as passed by an AO without a valid and legal jurisdiction following the judgment of the Hon‟ble Apex Court in Kanwar Singh Saini (supra) and be quashed as void ab initio. He stated that a similar view has also been held by the jurisdictional Hon‟ble Bombay High Court in Mavany Brothers vs CIT (2015) 62 taxmann.com 50 (Bom). This is because the foundation of the impugned assessment orders 48 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani proceedings do not at all exist making the consequent impugned assessment order void ab initio. The assessee also raised objection to the assessment order alleging that the LTCG could not be assessed u/s 147 of the Act but should have been assessed u/s 153A of the Act by taking recourse to the provisions of the section 153C of the Act as the same emanates from a search u/s 132 of the Act on some share brokers. The authorities assumed jurisdiction as above under the wrong provisions of the Act ignoring the specific mandatory provisions legislated for the purpose. 39. On this issue, The Ld. A.R. also submitted on this plea that admittedly, as per the order of the CIT (A), there was a search by the investigation unit New Delhi on some traders / brokers dealing in the scrip of a listed company D B (International) Stock Brokers Ltd as mentioned in para 7.2 page 38 onwards; Para 7.5 page 41, Para 7.6 page 45, Para 7.8 /7.9 on page nos. 41/42. The Ld. A.R. also stated that on facts on record as quoted by the CIT (A) in the appellate order, the said company was not searched but the operators providing the alleged LTCG, exempt from any income-tax 49 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani liability on the listed equity shares, including of the said company, were searched and the company itself was not involved in the alleged LTCG affairs management. Therefore, as per the ld. AR, an adverse cognizance could only be taken on the basis of the income- tax searches in the premises of those brokers / operators. It is also stated by the ld. AR that the company D B (International) Stick Brokers Ltd was not included in the alleged list of 84 companies prepared by the Kolkata Investigation Unit engaged in the alleged scam of LTCG as has been alleged by the CIT(A) in para 7.2 of his appellate order under this appeal. 40. The ld. AR, further, submitted that the impugned issue could only be considered by taking recourse to the mandatory non- obstante provisions u/s 153C of the Act and not u/s 147/148 of the Act. The Ld. A.R. also submitted that the structural amendment made u/s 153C of the Act w.e.f. 01/06/2015, which altogether changed the scenario of its application in the case of the person not searched, does not at all specify anywhere that it would solely be applicable only in respect of the searches conducted w.e.f. the said date. The ld. AR vehemently submitted that any information 50 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani received by the AO of the non-searched person after 31/05/2015 from the AO of the searched person in respect of a search conduced even before 01/06/2015 after that date will definitely be covered by the provisions of the section 153C of the Act as has been mentioned in the Proviso therein. 41. The ld. AR submitted as a corollary that the section 153B (2) of the Act also states that date of execution of the search will be the date when the last panchnama of the last search warrant is drawn. In this case, as per the order of the CIT (A) the impugned searches were conducted by the Investigation unit till the year 2015. However, in this case, the information was received by the AO of the assessee in March 2018. Therefore, the provisions of the section 153C of the Act as applicable on that day only were applicable here, as it is an independent section than the section 153A of the Act and in which there was no similar amendment as such w.e.f. 01/06/2015. The ld. AR further stated that had it been the intention of the Legislature to make the amendment u/s 153C of the Act effective only in respect of the searches conducted w.e.f. 01/06/2015 in the case of persons not searched then a specific 51 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani amendment to the said effect would have also been made therein. Therefore, the provisions of the section 153C of the Act as those stood in March 2018 were applicable for a reassessment of income u/s 153A r.w.s. 153C of the Act even in respect of the searches conducted before 01/06/2015 though the information was received thereafter. The ld. AR specifically stated that as on the date of receipt of the said information by the AO in March 2018 from the investigation unit sufficient time was available with the AO to initiate proceedings u/s 153C of the Act as the said period very much fell within the preceding six assessment years from the date of search on the brokers / operators, though which was also subject to judicial scrutiny as has been submitted about the validity of manner of transmission to and of use of the said information by the AO of the person not searched. 42. Similarly, the ld. AR drew our attention to the Note to the amendment in the section 153A of the Act by the Finance Bill 2017, the clause (59) which proposed to amend the section 153A of the Act where “4 relevant assessment” years in addition to the earlier six assessment years were added, specifically mentions in the 52 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani clause (iv) that the proposed amendment is applicable where the search is initiated on or after 01/04/2017. Similarly, the consequential amendment u/s 153C of the Act vide the clause (61) was made which also specifically refers that it is applicable in respect of a search initiated on or after 01/04/2017. 43. He further stated that similarly, the Memoranda vide clause (36) therein explaining the proposed amendment by the Finance Bill, 2015 in the definition of 153C of the Act also does not at all state anywhere that it was applicable only in respect of the searches initiated w.e.f. 01/06/2015, particularly when there was no corresponding amendment in the section 153A of the Act. This clearly proves that this amendment was very much applicable in respect of the searches conducted earlier also but for which the requisite information as mentioned u/s 153C of the Act was received by the AO of the non-searched person after 31/05/2015 or from 01/06/2015. Similarly, this is also clear from the clause (36) of the Notes to the amendment proposed in the Finance Bill 2015. 44. The ld. AR also stated that since, as per the CIT (A), the impugned addition is based on the search operations carried out by 53 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani the Directorate of Investigation New Delhi, on the persons who were involved in the business operations / other affairs of the said companies when the alleged relied information was found / seized in those searches. This proves beyond doubt that the alleged notice u/s 148 of the Act is based on the search proceedings undertaken by the revenue. 45. The ld. AR also submitted as is undisputedly apparent from the impugned assessment order that the same is the consequence of an income-tax search conducted by the investigation units of the income-tax department throughout the country when not only the alleged incriminating material was discovered and seized but statements of several persons searched besides many others were recorded by the revenue under the provisions of the Act. 46. For sake of ready reference, the prevalent section 153C of the Act w.e.f. 01/06/2015 at the time of issue of the notice u/s 148 of the Act on 28/03/2018, read as under: Assessment of income of any other person. 54 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani 153C. (1)Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,— (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years referred to in sub-section (1) of section 153A : Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to sub-section (1) of] section 153A shall be construed as reference to the date of receiving the 55 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person : Provided further that the Central Government may by rules made by it and published in the Official Gazette, specify the class or classes of cases in respect of such other person, in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years as referred to in sub-section (1) of section 153A except in cases where any assessment or reassessment has abated. (2) Where books of account or documents or assets seized or requisitioned as referred to in sub-section (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A and in respect of such assessment year— (a) no return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or (b) a return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section 56 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani (2) of section 143 has expired, or (c) assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153A. (3) Nothing contained in this section shall apply in relation to a search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A on or after the 1st day of April, 2021. 47. It has been stated before us by the Ld. AR that if the aforesaid provision and the facts are juxtaposed, then here in this case the information relied by the revenue to make the impugned addition, even if it was based primarily on some statements without definite incriminating material, as has been alleged by the revenue during the hearing of the appeal, was definitely sourced from a search u/s 132 of the Act and therefore, the same could only be used for making a reassessment of income u/s 153A read with the section 153C of the Act, on the basis of the said information contained in the documents seized as well requisitioned though which is not 57 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani clear as the same has been neither mentioned in the impugned assessment order nor copies of the same were ever provided to the assessee till then, despite several written requests made by the assessee to the AO / CIT(A). Before us ld. AR has clarified that the said information was denied to the assessee. 48. Further, in the CIT vs Laxman Das Khandelwal [2019] 108 taxmann.com 183 (SC), the Hon‟ble Apex Court held: According to Section 292BB of the Act, if the assessee had participated in the proceedings, by way of legal fiction, notice would be deemed to be valid even if there be infractions as detailed in said Section. The scope of the provision is to make service of notice having certain infirmities to be proper and valid if there was requisite participation on part of the assessee. It is, however, to be noted that the Section does not save complete absence of notice. For Section 292BB to apply, the notice must have emanated from the department. It is only the infirmities in the manner of service of notice that the Section seeks to cure. The Section is not intended to cure complete absence of notice itself. 49. Further, the Hon‟ble Apex Court in its judgment dated 14/02/2020 in ACIT vs Pankajbhai Jaysukhlal Shah (2020) 120 taxmann.com 318 (SC) dismissed the SLP of the revenue against the judgment of the Hon‟ble Gujarat High Court in the said case 58 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani (2019) 110 taxmann.com 51 (Guj), which had quashed the assessment order passed on the strength of a notice issued by a non-jurisdictional assessing officer, though the assessment order was passed by a jurisdictional assessing officer. Here also the impugned notice u/s 148 of the Act was issued beyond jurisdiction as for the purpose of assessment of an income on any material relating to an assessee seized during a search on some other person, the legislature has specifically prescribed the law to assume jurisdiction by an AO, overriding the provisions of the section 147/148 of the Act by legislating in its thoughtful wisdom under the mandatory provisions of the sections 153A/153C of the Act. The same can only be assumed when first the AO of the searched person records his satisfaction u/s 153C of the Act in respect of the said information and hands over the said information and the relevant material to the AO of the non-searched person and thereafter, when the AO of the said non-searched person records his satisfaction u/s 153C of the Act, a legal and valid jurisdiction is assumed by the AO of the non-searched person to whom the said material relates to, to pass an assessment order u/s 153A of the Act (and not u/s 147 of the Act). Thus, here the impugned 59 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani assessment order was passed beyond jurisdiction by the AO and cannot at all be validated under any circumstance and even by consent or option of the Court. 50. On a careful perusal of the provisions as referred to above, we find that, there was a vast difference in the application of provisions of the section 153C of the Act prior to 01/06/2015 and thereafter. Substantial amendment was made in the said section in two phases: i) W.e.f. 01/06/2015- when no simultaneous amendment was made in the section 153A of the Act; and ii) W.e.f. 01/04/2017- when the amendment was made parallel to the amendment u/s 153A of the Act. 51. Thus, a) The section 153C was amended w.e.f. 01/06/2015 when the following additional amendments were made and this led to construction of the said section as below: "Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,— (a) any money, bullion, jewellery or other valuable article or 60 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person..........‖ b) Thereafter, the following amendments were made in the said section w.e.f. 01/04/2017 and, the section shaped and which remained in the statute till 31/03/2021 mentioned above. c) The amendments brought in section 153C was only to protect the revenue and not to resort to rigours of section 148 and whenever in cases of search in case of a person, any material or information pertaining to such other person is found AO can initiate 153C and can make addition or assessment for the relevant assessment year or years. 52. On perusal of the above section amended from time to time, it is clear that the provisions of the said section could only be applied till 31/05/2015 when from the premises of the searched person, some books of account and/or valuables or documents seized or 61 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani requisitioned belongs to a person other than the person searched. Which meant that a document or books of account, valuables or asset seized etc belonging to the other person not searched should have been found in a physical form from the premises of the person searched. Any information contained in the material so seized from the premises of the person searched which did not belong to the non-searched person but contained therein any information relating to the non- searched person did not authorize the revenue to take an action u/s 153C of the Act. In that case, the only course available to the revenue till 31/05/2015 was to issue a notice u/s 148 of the Act because the information/ material seized did not belong to the non-searched person. There was a specific emphasis to the words BELONGS OR BELONG TO A PERSON other than the person searched. In this case, admittedly, during the course of the said searches in the premises of share brokers or others, no material in physical form of the assessee was found. Therefore, upto 31/05/2015, in absence of any physical seizure belonging to a non- searched person, no assessment proceedings could be initiated by taking recourse to the provision u/s 153C of the Act. 62 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani 53. Now, after the amendment therein w.e.f. 01/06/2015, we find that, the concept of belonging was just restricted to the valuables found in any form u/s 153C(1)(a) of the Act, but a new sub clause (b) has been inserted as above, where the requirement in physical form of books of account, documents, etc. of a person not searched to have been seized from the premises of the person searched was dispensed with and the word „belonging‟ was removed by substituting the same with pertains or pertain to besides making an addition of the words there in for any information contained therein pertains or relates to a person not searched. Thus, the scope of application of the said section was widened, particularly to overcome the judicial interpretation against the revenue whose officers were applying the said section 153C of the Act considering any information in the seized material as pertaining or relating to the person not searched as against the term belonging to. Therefore, the said amendment w.e.f. 01/06/2015 actually clarified as to what was the mind of the revenue even as per the said section 153C of the Act as it existed earlier. 63 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani 54. The concept of assessments/ reassessments of income u/s 153A and also with the section 153C of the Act was introduced by the Finance Act 2003 w.e.f. 01/06/2003 and the said amendment in the section 153C of the Act was made w.e.f. 01/06/2015. The purpose of the same was explained in the para 36 to the Notes to Clauses of the Finance Bill 2015 as below: Clause 36 of the Bill seeks to amend section 153C of the Income-tax Act relating to assessment of income of any other person. The existing provisions contained in section 153C provide that in the course of an assessment proceeding, in the case of a person in whose case search action under section 132 or action under section 132A have been conducted, and whether the Assessing Officer is satisfied that the assets or books of account or documents seized belong to another person, then, the assets or books of account or documents seized shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against such other person, if he is satisfied that the books of accounts or documents or assets seized have a bearing on determination on the total income of such other person. 64 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani It is proposed to amend sub-section (1) of the said section so as to provide that where the Assessing Officer is satisfied that, (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned, shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if that Assessing Officer is satisfied that the books of account or documents or assets, seized or requisitioned, have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in sub-section (1) of section 153A. This amendment will take effect from 1st June, 2015. 65 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani 55. Thus, on a bare perusal of the plain language of the above explanation in respect of the amendment introduced in the section 153C of the Act w.e.f. 01/06/2015, we find that it mandates that in case any information is found during the course of any search anywhere in respect of a person not searched, then for the purpose of reassessment of income on the basis of the same, it can only be considered by taking recourse to the provisions of the section 153C to make a reassessment of income u/s 153A of the Act and not under section 148 of the Act to make an assessment u/s 147 of the Act. 56. Before us, Ld. A.R. submitted that, here the revenue used some information was gathered from the seized material from the premises of the persons searched as has been mentioned by the CIT (A) in his appellate order and also in reasons recorded in para 2 (supra) that the fact that assessee taken accommodation entry of bogus LTCG was found from the search of Evergreen Enterprises, then the only course available to the revenue was to take the route of the section 153C of the Act and not u/s 148 of the Act. It is because that there was a definite information of escapement of the 66 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani income, its quantification, the nature of the transactions, the scrip transacted, the person who assisted etc. etc. found from the person searched u/s132 of the Act by the revenue through the investigation unit and accordingly directly passed on the AO of the assessee as against the mandate as per the provisions of the section 153C of the Act. The investigation unit was legally obliged to send the same to the AO of the person searched may be with a recommendation to send the same to the AOs of all those concerned persons as has been done by the investigation unit directly but definitely in an illegal manner beyond the prescribed jurisdiction for the purpose by the law. This is the precise information to be used by the revenue to initiate proceedings of reassessment by issuing a notice u/s 153C of the Act instead erroneously u/s 148 of the Act. 57. We agree with the contention of the assessee that, since, section 153C of the Act overrides the provisions of the sections 147, 148,149, 151 and 153 of the Act, it was absolutely mandatory for the Assessing Officer of the person searched to send the same to the AO of the non-searched person and thereafter, the concept of verification of it being incriminating or not is in the sole domain of 67 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani the Assessing officer of the person not searched who if after verification finds that the information received by him from the AO of the person searched is incriminating and contains details of some escaped income for one or more assessment years, he will record a satisfaction to the said effect and proceed to reassess the same u/s 153A of the Act which is clear by the words – if that AO (of the non-searched assessee) is satisfied that the information so received has a bearing on the determination of total income of the said person for the relevant year or years, which means that a satisfaction to the effect of escapement of such income may be for one year or more after verification of the material received, because in some cases it may be that the person searched may not be recording the relevant transaction in his books of account leading to an incrimination but the non-searched person might have properly disclosed the said transaction in his books of account, where it can no more remain incriminating in his hands. In such case, no reassessment proceedings can be initiated under the provisions of the section 153C of the Act of the non-searched person. Here in this case as noted above the information of alleged bogus LTCG was gathered from the search of Evergreen Enterprises and other 68 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani searches of entry operators. Thus, the only recourse for the AO was to initiate 153C of the Act qua this addition, and even rope into this issue or addition in the assessment made u/s 153A for that year by recording the satisfaction that this information was gathered from a search. 58. Further, on perusal of the section 153A (1)(a) of the Act, it is clear that it was mandatory for the AO of the person searched u/s 132 of the Act to issue a notice of assessment / reassessment for each of the six assessment years before the period of the search irrespective of discovery of any incriminating material during the course of search. However, no similar stipulation exists u/s 153C of the Act which only refers to reassessment of income of the assessment year in respect of which some incriminating material was discovered in a search on some other person. 59. In so far as the apprehension of the revenue expressed during the appellate proceedings before us that, in such cases, a notice will have to be issued for a period of six / ten assessment years though the information is only for one year leading to additional burden of six and more assessments whereas by taking recourse to the 69 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani section 148 of the Act, the assessment / reassessment will be made for one year only, in our opinion, the said apprehension is completely illegal; because, firstly, the section 153C of the Act clearly envisages to issue notice only for the assessment year or years for which any incriminating information relating to the non- searched assessee was found to the satisfaction of the AO of the non-searched person. The legislature in its wisdom has specifically mentioned separately year and years therein clearly restricting its application only to the assessment period for which the incriminating information was found and not for the period of six years, and secondly, there can be more than one reassessment proceedings for the same assessment year by taking recourse to the provisions of the section 153C of the Act as the action may follow on finding incriminating information for the same period but from different persons searched and at different locations or different times. In such a situation, every time when such information is found in a new search, a fresh proceeding u/s 153C of the Act will ensue irrespective of the earlier action(s). There is no limit to multiple reassessments in such cases as is in the case of reassessment proceedings u/s 148 of the Act,(3) The Hon‟ble 70 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani Apex Court in Sinhgad Technical Education Society 2017-TIOL- 309-SC-IT (para 18)has also elaborated the above law as below: 18) The ITAT permitted this additional ground by giving a reason that it was a jurisdictional issue taken up on the basis of facts already on the record and, therefore, could be raised. In this behalf, it was noted by the ITAT that as per the provisions of Section 153C of the Act, incriminating material which was seized had to pertain to the Assessment Years in question and it is an undisputed fact that the documents which were seized did not establish any co-relation, document-wise, with these four Assessment Years. Since this requirement under Section 153C of the Act is essential for assessment under that provision, it becomes a jurisdictional fact. We find this reasoning to be logical and valid, having regard to the provisions of Section 153C of the Act. Para 9 of the order of the ITAT reveals that the ITAT had scanned through the Satisfaction Note and the material which was disclosed therein was culled out and it showed that the same belongs to Assessment Year 2004-05 or thereafter. After taking note of the material in para 9 of the order, the position that emerges there from is discussed in para 10. It was specifically recorded that the counsel for the Department could not point out to the contrary. It is for this reason the High Court has also given its imprimatur to the aforesaid approach of the Tribunal. 71 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani 60. Thereafter, Hon‟ble Delhi High Court in Index Securities & Research Pvt. Ltd2017-TIOL-1813-HC-DEL-IT(para 31) has held as below. 31. As regards the second jurisdictional requirement viz., that the seized documents must be incriminating and must relate to the AYs whose assessments are sought to be reopened, the decision of the Supreme Court in Commissioner of Income Tax-III, Pune v. Sinhgad Technical Education Society (supra) settles the issue and holds this to be an essential requirement. The decisions of this Court in CIT-7 v. RRJ Securities (2016) 380 ITR 612 (Del) and ARN Infrastructure India Limited v. ACIT [2017] 394 ITR 569 (Del) also hold that in order to justify the assumption of jurisdiction under Section 153C of the Act, the documents seized must be incriminating and must relate to each of the AYs whose assessments are sought to be reopened. Since the satisfaction note forms the basis for initiating the proceedings under Section 153C of the Act, it is futile for Mr. Manchanda to contend that this requirement need not be met for initiation of the proceedings but only during the subsequent assessment. 61. If we analyse the provisions of the sections 147 and 148 of the Act, we find that they are somehow akin to the provisions of the section 153A and section 153C of the Act, although the operation of these two sets of sections are applicable in different situations. 72 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani Section 148 of the Act comes into picture where any information of an escaped income received by the Assessing officer did not flow from any search anywhere. It could be also on the basis of information already on the record of the AO as was mentioned in the section 147 of the Act at the relevant time. It could also be received from the Assessing officer of any other assessee not searched but during the course of normal assessment proceedings of the said assessee, his AO discovers some escapement. In any of such situation, then after recording a satisfaction of an escapement of income by way of reasons u/s 148 of the Act, a reassessment u/s 147 of the Act is made. The said reasons u/s 148 of the Act could also be recorded on a prima facie escapement of income and which may not necessarily be beyond doubt. 62. However, w.e.f. 01/06/2015, after an income tax search u/s 132 of the Act on any person, if any incriminating information in any manner much less any material in physical form or even otherwise in any manner, is found therein relating (and not belonging) to a non-searched person then the Legislature, in its wisdom, created a special provision overriding the applicability of 73 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani the sections 147/148 of the Act, thereafter, legislating assessment of any escaped income on the basis of the alleged definite incriminating material only and only u/s 153A of the Act by taking recourse to the provisions of the section 153C of the Act. It needs to be kept in mind that this is a jurisdictional issue and mandatory to assume jurisdiction to make an assessment / reassessment of any escaped income in consequence to a search. Relevancy of the provisions of the sections 147/148 of the Act becomes somehow redundant only in so far as the assessment / reassessment of any escaped income on the basis of discovery in a search proceeding. 63. Thus, in our opinion, both the above set of provisions attract action of assessment / reassessment of the alleged escaped income but definitely under the two different situations on facts. Had this not been the mandate of the Legislature, then there was no need at all to craft and carve out separate provisions containing non obstante stipulations after a search not only in the case of a person searched but also in the case of person not searched because then in the case of non-searched persons sections 147/148 of the Act by themselves would have taken care as it existed earlier prior to 74 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani introduction of the sections 158BC and 158 BD w.e.f. 1995 and has been made applicable now again w.e.f. 01/04/2021 as application of the provisions of the section 153A/153C of the Act have been revoked on the searches conducted after 31/03/2021. 64. The law as culled out from these amendments and as we have understood, the revenue officer can initiate the proceedings under section 147 or u/s 153C in different circumstances;  Firstly, in case, where some material is received from the AO of another person, the AO of the assessee verifies it from the information on his record of the assessee, determines its character whether incriminating or not and being an escaped income, then records a satisfaction by way of reasons u/s 148 of the Act, issues a notice u/s 148 of the Act to file a return of income and then makes a reassessment u/s 147 of the Act.  Secondly, in the case of the person searched, after the search, the AO of the person searched transmits the relevant information as found by the revenue which even relates to another person not searched to the AO of the non-searched person who thereafter conducts his proceedings under same 75 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani procedure, i.e., the AO of the said assessee verifies it from the information on his record, determines its character, whether incriminating or not and being an escaped income, then records satisfaction by way of a note u/s 153C of the Act, issues a notice u/s 153C to file a return of income for reassessment, then he makes an assessment / reassessment of such income u/s 153A of the Act. 65. Now, the entire procedure is the same except under different sections having two separate contingencies. In our opinion, the Legislature has not left any discretion on the revenue officers to make the assessment /reassessment under any of the said set of provisions as per their choice. This is a jurisdictional aspect and goes to the root of the assessment. 66. We also notice that, the Legislature for enforcement of the provisions of the assessment after an income-tax search, has specifically provided u/s 132(9A) of the Act, that the seized material during the course of a search would be handed over to the Assessing Officer of the person searched and in further rhythm thereto, the Assessing officer of the person searched would examine 76 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani the seized material including any information contained therein relating to a person not searched, and then will hand over the same to the Assessing officer of the person not searched as has been prescribed u/s 153C of the Act. The section 132 (9A) reads as under: (9A) Where the authorized officer has no jurisdiction over the person referred to in clause (a) or clause (b) or clause (c) of sub- section (1), the books of account or other documents or assets seized under that sub-section shall be handed over by the authorized officer to the Assessing Officer having jurisdiction over such person, within a period of fifteen days of such seizure and thereupon the powers exercisable by the authorised officer under sub- section (8) or sub- section (9) shall be exercisable by such Assessing Officer. 67. Thus, from a reading of the aforesaid section, in our opinion, the Legislature has categorically synchronized the manner of use of any information found during a search. It does not envisages that the officers of the Investigation Unit to part with the information in any manner to the AO of the persons not searched, which as per the section has to be given to jurisdiction of the Assessing Officer of the person searched. The section has not conferred any concurrent jurisdiction on the said authorized officers to send it any AOs of any 77 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani other assessee. There may be some information gathered by the officers of the investigation unit in other manner like surveys, enquiries u/s 133(6) of the Act etc., which is not at all connected in any manner to any search, then the said information may be directly sent by them to the Assessing Officer of the non-searched persons, because then there is no specific mandatory assessment provision with regards to survey / enquiry etc. which are governed by the normal assessment provisions. However, on the contrary, any information gathered by the officers of the investigation unit on the basis of the material seized in any search of a person u/s 132, can only be disseminated further to the concerned AOs of the relevant assessees‟ not searched, only through the AO of the person searched who is solely permitted by the Act for the purpose. The officers of the investigation unit are authorized to take action as is permitted u/s 132(1) of the Act and then to proceed further as mentioned therein only after undertaking the search action. In case, the officers of investigation unit desire to extend their domain for undertaking further action on the persons not searched but who are suspected to have concealed their incomes as per the information gathered in any search, they can search those 78 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani assessees‟ or any survey action and then send the information gathered therein directly to the AOs of the persons consequently later searched but who had not been searched earlier. Thus, sending of any intimation by the officers of the investigation unit on the basis of the material found in a search in respect of the non- searched persons directly to the AOs of the non-searched persons is apparently contrary to section 132(9A), whether pre or post amendment the 153C of the Act. Even in the pre amendment provision up to 31/05/2015, this intimation could only be sent by the AO of the searched person to the AOs of the non-searched person to take necessary action u/s 148 of the Act or any other applicable provision of the Act, as the officers of the investigation unit were not at all authorized for the same. At least we do not find any provision of the Act, which authorizes the officers of the investigation unit to send the information found during a search to the assessing officers of the persons not searched in any manner. Be that as may be, we are not going on the aspect or adjudicating this issue about legality of the manner in which investigation wing can send any information gathered from the search of a person to 79 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani the AO‟s of the other person (i.e., non searched person), as we only trying to sychronise the provision of section 153C and 132(9A). 68. Ergo, the officers of the investigation unit are just to assist the assessing officers and wherever they search an assessee, then the provisions of the section 153A and 153C of the Act gets triggered up to 31/03/2021 by overriding all other provisions which is a jurisdictional aspect and has to be followed. 69. Before us, on behalf of the assessee, the ld. CIT DR vehemently supported the orders of the lower authorities and stated that the notice issued u/s 148 of the Act on 28/03/2018 was completely valid as the seized material was received by the AO on 31/10/2018 after the date of issue of the said notice and by the said time the AO had already issued notice u/s 148 of the Act on the basis of received information of the escapement of income from assessment by the assessee, particularly when the limitation to issue the said notice was to expire on 31/03/2018 and there was no other option with the AO. It was also submitted on behalf of the revenue that a notice u/s 153A of the Act could only be issued for 6 assessment years before the date of search and for the earlier 80 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani period the only option was to issue a notice u/s 148 of the Act if the limitation for the purpose permitted. Thus, as per the ld. CIT DR, the assessment order passed u/s 147 of the Act on 30/12/2018 by the DCIT Central Circle 4(1) Mumbai was a perfect legally enforceable assessment order based on specific information with the AO of escapement of income. He also submitted that it is the sole discretion of the revenue officers to apply any of the assessment provisions under the Act to assess the escaped taxable income of an assessee found during the search and which provisions are legislated solely for the benefit of the revenue officers administering the income-tax law and an assessee is not affected in substance with the same because admittedly his concealed income so detected had escaped assessment and which needed to be brought to tax. In his submissions, the ld. CIT DR also submitted that even otherwise also an assessee must not be allowed to evade payment of due government income-taxes on technicalities of application of the different provisions of the law. The ld. CIT DR also stated that reassessment proceedings initiated by issue of the notice u/s 148 of the Act on 28/03/2018 for this assessment year could not at all be abated as the said proceedings were not pending 81 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani as on the date of the search in October 2017 but were initiated much thereafter, and also admittedly much before receipt of the seized books of account from the investigation wing by the AO on 31/10/2018. 70. The ld. CIT DR also stated that it is a normal established practice in the income-tax department to transfer the assessment records of assesses from an AO to another AO in the same PCIT charge without any specific order u/s 127(1) of the Act for the purpose. The assessee cannot have any grievance to the same as he is not at affected by such transfer because it is for the revenue to decide as to will be his assessing officer within the same territorial jurisdiction. Thus, he stated that the assessment jurisdiction was legally held by the ACIT Circle 20(2) Mumbai on 11/09/2018 when the PCIT 20 Mumbai passed the assessment jurisdiction transfer order over the assessee from him to the ACIT Central Circle 4(1) Mumbai. 71. As regards the third plea of the assessee, the ld. CIT DR submitted that the income-tax department after a thorough investigation / searches/ surveys etc pan India on the brokers 82 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani /operators engaged in providing bogus Long Term Capital Gains on listed scrips of Indian companies and thereby assisting several thousand assesses to evade payment due income-tax on their unaccounted money, broke the said scam and brought to the tax the said escaped false claims which have also been admitted by several assesses across the country by paying due income-tax on the escaped income so detected. Thus, the assessee should also not be permitted to escape his income-tax liability on the bogus claim made by way of an exempt LTCG in his return of income which was detected by the revenue with a highly pain taking and successful process. He also stated that it is not clear from the orders of the lower authorities challenged in this appeal by the assessee whether the said bogus claim rejected and so assessed was the result of any information actually found during some search or was detected by the revenue during other investigation, enquiries etc. otherwise under other available provisions of the Act. However, he also stated that since, the operators /brokers were searched before 01/06/2015 and the alleged incriminating material found did not physically belong to the assessee but just had some reference to the escaped income of the assessee on the basis either their bank 83 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani accounts or their books of accounts / other relevant documents / reference material gathered from other agencies containing name of the assessee as a part of the scam claiming exempt LTCG, the provisions of the amended section 153C of the Act w.e.f. 01/06/2015 were not at all applicable. He also urged that the assessee must not be given any benefit to evade payment of due income-tax on the alleged legal technicalities where the fact of escapement of income from taxation by way of a false claim of exemption u/s 10(38) of the Act by him for a bogus LTCG was unearthed by the revenue. He finally submitted that the assessment of the said escaped income u/s 147 of the Act must be affirmed as on facts and in law existed as on the said date, there was no illegality at all therein. 72. In rejoinder, the Ld. A.R. while reiterating his submissions made earlier stressed that it is not at all open to the revenue officer to apply the codified law by twisting or ignoring the said provisions as per their convenience or the past practices, which may be unchallenged so far. They are strictly bound to follow the law legislated in the same spirit in which the same has been crafted by 84 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani the Legislature. The provisions of the law are not just guiding principles to collect the revenue but are the actual road map to be strictly adhered to in the letter and spirit by its adjudicators. None including any revenue officer can be permitted to perpetuate some wrongdoings as per the past usages which had gone unnoticed till questioned. There is option with them in any manner to violate the same. The revenue is also not permitted to presume something to have existed in the statute when the law has been crafted in an unambiguous and plain words with no if and buts, particularly with reference to the Memoranda explaining the insertion of the same in the statute, showing intentions of the Legislature. The sections 153A, 127 and 153C of the Act are worded absolutely in a simple language with no ambiguity at all in any manner to appreciate the meaning and purpose of the same, besides uniformity of adherence by the revenue officers who are duty bound to follow the said provisions as directed by the legislature. The ld. AR also submitted that the revenue has not been able to rebut in any manner the legal contentions raised and submitted by the assessee are not correct. He also stated that there is no bar to collect the due taxes from any person but for which the legislature has not granted unbridled and 85 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani unfettered powers to the law administrators to adopt any method to levy taxes, not legislated or to use the same as per their own conveniences with presumptions or by twisting the same. However, the suspicion of evasion of taxes may be strong, yet the provisions of the legislated law, as those are codified, to be applied for levy. If the revenue officer failed to adhere to the provisions strictly, then the entire edifice of the revenue built for assessment has to be demolished and declared ultra virus by the appellate authorities. Thus, the ld. AR submitted that the assessment order must be declared as illegal void ab initio and the addition made without following the law be also deleted. 73. We have perused the entire material placed on record by both, the assessee and the department and arguments, put fourth before us. The record show that the notice issued u/s 148 of the Act on 28/03/2018 was solely based on some information received by the then AO ITO Ward 20(2)(4) Mumbai from the Investigation Unit of the department which was found during the course of search on the M/s Evergreen Enterprises and assessee on 06-07/10/2017, even to the extent that the said AO has considered the statements 86 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani of 4 persons recorded during the said search u/s 132(4) of the Act while recording the „reasons‟ to issue the said notice u/s 148 of the Act and thereafter on the basis of which the assessment order in this appeal was passed u/s 147 of the Act on 30/12/2018. The ITO has referred in his reason that from the search of M/s Evergreen Enterprises, in which assessee is a partner; assessee has taken accommodation entry of bogus LTCG in shares of M/s D.B. International. Further, various persons have taken loan from assessee and M/s Evergreen Enterprises for sums aggregating to Rs. 75.74 crores. 74. The moot question before us is, whether there was any escapement or whether any income representing in the form of „asset‟ which has escaped assessment amounts to Rs. 50 lakhs or more. If any such escaped assessment for Rs. 50 lakhs or more which is in the form of asset based on any books of account or document or evidence, whether AO can initiate proceedings u/s 148. The conditions for invoking the 4 th proviso read with Explanation 1 thereto is that the relevant assessment years relevant to previous year in which search is conducted which falls beyond 87 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani the 6 assessment years, but not later than 10 assessment years, the AO has to necessarily frame the assessment u/s 153A and the statute bars the AO to issue any notice for assessment or re- assessment. Here in this case, from the perusal of the reasons recorded as incorporated earlier part of the order, we have already noted that AO has given a finding that based on search conducted in the case of M/s Evergreen Enterprises wherein assessee is one of the partner, it was found that assessee has taken bogus /LTCG for sale of penny stock. Another important fact which has been noted on the information from the said search and also consequently from the search conducted in the case of the assessee as has been referred to in the assessment order, it is seen that certain individuals and business concerns have borrowed cash loan from /through Nilesh Bharani / M/s Evergreen Enterprises for sum aggregating to Rs. 75,74,20,000/- in the FY 2010-11. This loan definitely represents the „asset‟ which in the belief of the AO has escaped assessment. What the proviso speaks about is that, books of account or other document or the evidence revealed that income in the form of an asset has escaped assessment. The income in the form of an asset can include share and securities and loans & 88 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani advances, etc. as defined in Explanation 2. As observed and held by us in the foregoing paragraphs, the evidences found during the course of search and seizure operation in the case of the assessee and M/s Evergreen Enterprises, wherein assessee was a partner, it was found that that they have given cash loans to various persons for sums more than Rs. 75.74 crores. This cash loan is allegedly out of undisclosed investment or money which partake the character of an asset, because, giving of cash loans is certainly an asset within the meaning of Explanation 2. Further, in so far as escapement of income on account of alleged penny stock, first of all, the investment in shares and sale thereof has to be seen, whether it is undisclosed income. If purchase of penny stock has been made is in the from undisclosed investment and sale has been made which has been credited in accounts, then it represent sale of an asset which is treated as income from undisclosed sources. The shares in such case are an asset from undisclosed investment and sale is therefore treated as income from the sale of an asset credited in the form of cash in the books deemed to be income of the assessee from undisclosed sources. Thus, if the AO founds that after the search conducted in the case of assessee, if there is any evidence or 89 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani material revealing income in the form of asset which has escaped assessment, he could not have issued a notice of re-assessment u/s 148 which is clearly barred by the statute after the mandate brought w.e.f. 01.04.2017, which here in this case the mandate provision is applicable because search is happened after this date. This issue is further analyzed in the forthcoming paragraphs. 75. As analyzed by us in the foregoing paragraphs, section 153A of the Act as it came into the Statute book w.e.f. 01/04/2017, providing that an assessment or reassessment of income of the person searched is to be made mandatorily u/s 153A of the Act for the 6 assessment years before the date of search which in this case were the AYs 2012-13 to 2017-18; and also mandatorily u/s 153A of the Act for the 4 earlier assessment years beyond the said 6 assessment years as above if and only if when the undisclosed income found in the material seized was Rs 50,00,000/- and above and which was represented by an asset defined in the Explanation 2 in the said section as below which categorically included loans also given by the assessee. 90 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani “Asset” shall include immovable property being land or building or both, shares and securities, loans and advances, deposits in the bank account. 76. The alleged addition made by the AO in the assessment order and also mentioned in the said notice u/s 148 of the Act was Rs. 85 crores approximately which was far more than Rs 50,00,000/- and admittedly as per the AO, the same was in the form of loans given by the assessee though out of the books of account. Here in this case, the said Proviso definitely applies and the correct course for the AO was to undertake the reassessment proceedings under the mandatory provisions of the non-obstante section 153A of the Act for this assessment year which falls in the extended 4 relevant assessment years. 77. Even in the assessment order, AO has mentioned that diaries were found and seized at the premises of M/s Evergreen Enterprises wherein various documents were found and seized which revealed that cash transaction were both for lending and borrowing by the various individuals and entities through Nilesh Bharani and M/s Evergreen Enterprises has been made. The cash 91 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani loan ledgers were found and seized at the premises of the assessee and M/s Evergreen Enterprises are involved in lending and borrowing cash loans. The AO in his order has given finding and held that the material and evidences gathered revealed that assessee has lending and borrowing cash loans to various persons and has drawn adverse inference. He has finally made the addition u/s 68 for sum amounting of Rs. 75,74,20,000/- as unexplained cash credit when he himself and at the same time has invoked the provision of section 269SS for accepting the cash loan and initiate the penalty proceedings u/s 271D. The AO is referring to documents seized from Evergreen Enterprises that there are both lending and borrowing of cash loans by various persons that Evergreen Enterprises was involved in lending and borrowing of cash loans. AO in the assessment order has also stated that assessee has entered into cash loan borrowing with Shri Nilesh S. Bharani / M/s Evergreen Enterprises. First of all, assessee here is Nilesh S. Bharani, then which assessee has taken loan from “Shri Nilesh S. Bharani / M/s Evergreen Enterprises”. The AO himself is not clear whether the amount of Rs. 75.74,20,000/- represents that assessee has received any loan in cash or has given loan in cash, 92 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani when in the reasons, he has inferred from the material on record that cash loans was given to the various parties or individuals as recorded by him in the reasons recorded. If there are both lending and borrowing then what is quantum of borrowing and what is the quantum of lending or it consists of both has not been quantified. If assessee is acting as financial broker then how only borrowing is brought to tax as deemed income under section 68, when there are lending also, as observed by the AO that there were borrower and lender ledger accounts were found. How can it be not held that in these circumstances that in this case loan is not an asset as stipulated in explanation 2. If it is both, then how addition can be made only for cash loans and why not commission is added, if it is undisclosed transaction. Thus, in these circumstances, we hold that looking to the documents and evidence which was in possession of the AO prima facie revealed that income representing in the form of asset which has escaped assessment which was more than 50 lakhs and in view of the amending provision AO was debarred from taking any action and for reassessment u/s 147/148. 93 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani 78. The important phrase use in 4 th proviso in Clause (a) is that “AO should be in possession of ......., which revealed that income representing in the form of asset which has escaped assessment.......” The asset or liability is a part of balance sheet. If the AO based on evidence or documents found that these assets are in fact in the nature of income which has escaped assessment, the AO can acquire jurisdiction for going beyond the period of 6 years for further period of 4 years from the end of the assessment year relevant to previous in which search was conducted and then he has to mandatorily pass assessment order for that relevant assessment year u/s 153A and he is debarred from taking any action under section 148. As noted above, the asset also includes loans and advances which the same has been found to be non- genuine, is treated as income of the assessee. 79. Accordingly, the submissions made by the Ld. Counsel of the assessee during the course of the hearing of this appeal as discussed herein above, which we have also analysed in light of the relevant provision hereinfore, we are in tandem with him, in so far as the legal position is concerned. In view of our analysis of the 94 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani provisions of the law, we are of the opinion that the correct legal course for the AO in this case was to issue a notice u/s 153A of the Act for this assessment year as well as relevant assessment year out of the 4 such extended relevant assessment year beyond the 6 assessment years and should have proceeded to make the reassessment of income allegedly found during the course of search in the premises of the assessee as per the law laid down u/s 153A of the Act. 80. As regards the contention of the Revenue that the books of account were handed over to the AO of the assessee by the Investigation Unit of the income-tax department on 31/10/2018 and not before the date of issue of the notice u/s 148 of the Act and therefore, the notice was correctly issued u/s 148 of the Act, we do not find force in the said submissions which are contrary to express provision of the law as discussed earlier. Firstly because, as per the section 153A of the Act, the extended period of 4 relevant assessment years is not based on receipt of the seized books of account by the AO from the investigation wing, but triggers immediately on the date of search and consequent notices u/s 153A 95 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani of the Act are to be issued mandatorily for the 6 assessment years preceding the date of search by the AO anytime after the AO receives the information of the said search u/s 132 of the Act having taken place on his assessee; and also for any or all the extended 4 relevant assessment year(s) after he received and has in his possession information of an undisclosed income represented by an asset found during the course of the said search in the premises of the assessee for an amount of Rs 50,00,000/- and above, which admittedly here, the AO had received and was in his possession before issuing the notice u/s 148 of the Act on 28/03/2018. 81. Secondly, the legislature has also not prescribed any period of limitation to issue any notice for assessment / reassessment u/s 153A of the Act though there is a specific period of limitation after the search to complete the said assessment. The AO can also issue notice(s) u/s 153A of the Act at different times for different assessment year(s) within the limitation period, off course by adhering to the settled principles of law and natural justice by allowing sufficient reasonable time to the assessee for compliances required as per the law. The Act does not prescribe anywhere that 96 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani all the notices u/s 153A of the Act must be issued simultaneously at the same time. Since, here the fact of the search had already come to the knowledge of the AO by 28/03/2018, the AO either should have issued a notice on 28/03/2018 u/s 153A of the Act for this assessment year to make a reassessment of income or should have made further enquiries from the Investigation Unit seeking other details including the books of account etc. if thought necessary by him and then the AO should have proceeded to issue the notices u/s 153A of the Act for the 6 assessment years plus the above relevant extended assessment year, because the limitation to complete the assessment / reassessment of income based on the date of search as mentioned in the records was 31/12/2019 and when the AO has already issued notices u/s 153A of the Act for the said 6 assessment years on 19/01/2019 and completed the assessments of incomes for the said 6 assessment years vide order dated 31/12/2019 passed u/s 153A of the Act. Thus, the assessment of income for this assessment year including the 6 said assessment years was to be passed either simultaneously or separately u/s 153A of the Act by 31/12/2019 and not at all in any manner u/s 147 of the Act for this assessment year. 97 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani 82. We have also noted the unambiguously worded language of the section 153A of the Act for the 4 extended relevant assessment years w.e.f. 01/04/2017 which uses the relevant provision in the Fourth Proviso as under: “Provided also that no notice for assessment or reassessment shall be issued by the Assessing Officer for the relevant assessment year or years unless – (a) The Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year or in aggregate in the relevant assessment years;‖ Thus, the above provision has to be applied in any of the above stated mutually exclusive conditions because use of word “or” excludes other conditions and every word is mutually exclusive to the other incriminating material. Therefore, the said section applies as soon as any of the conditions mentioned therein is met. 83. Though, we have already allowed the above legal issues, the 3 rd legal issue which has been raised that the AO who passed this assessment order did not have a valid and legal assessment 98 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani jurisdiction over the assessee because the assessment jurisdiction transfer order dated 11/09/2018 passed by the PCIT-20, Mumbai was not a valid assessment jurisdiction transfer order because the ACIT, Circle-20(2), Mumbai from whom the said assessment jurisdiction was transferred, never had any valid and legal jurisdiction with him over the assessee at the relevant time and which was definitely and could only be with the ITO, Ward-20(2)(4), Mumbai, as per the mandatory and binding instruction no. 1/2011 dated 31/01/2011 of the CBDT issued u/s 119 of the Act defining the assessment jurisdiction u/s 120 of the Act. According to the Ld. AR, the jurisdiction to make an assessment of income of the assessee on the date of the said assessment jurisdiction transfer order was only with the ITO, Ward-20(2)(4), Mumbai and his PAN was also located with the ITO, Ward-20(2)(4), Mumbai and as per which the AO issued the notice u/s 148 of the Act on 28/03/2018, though may be incorrectly u/s 148 of the Act and not u/s 153A of the Act, after the AO received the alleged information of the search from the Investigation Unit based on the location of the PAN of the assessee with him. 99 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani Since, we have already allowed the appeal on the other legal issues, therefore we are not deciding this issue and the same is treated as academic. 84. Now, in respect of the second plea of the assessee that the reassessment of income declared in the return of income as long- term capital gain could not be made by taking recourse to the section 148 of the Act and the same must have been made as per the provisions of the section 153C of the Act, it is not the case of the revenue that the AO did not have the requisite information in his possession, received from the Investigation Unit of the department, found during the course of search because the same is very much clearly spelt in the reasons recorded to issue the notice u/s 148 of the Act on 28/03/2018 that the said income had escaped assessment earlier in the normal course due to some incorrect claim made by the assessee. 85. Further, it is also not disputed that as per the order of the CIT (A) in this case, the Revenue came in possession of the said information in some searches carried out by the Investigation Unit on the brokers / operators of the listed scrip DB International 100 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani (Stockbrokers) Ltd. Further, as noted by AO in his reasons recorded in para 2 of reasons that, this information surfaced from the search of M/s Evergreen Enterprises, so all the more it was an information pertaining to the assessee found during the course of search of a person covered u/s 153A. On perusal of the provisions of the section 153C of the Act, it is apparent that after the amendment w.e.f. 01/06/2015 therein, if the AO of the person not searched comes into possession of any information, which may not be the books of account but by way of any other document pertaining to or any information contained therein relating to the assessee not searched, then the only course available with the AO of the said non-searched person is to only proceed by recording a satisfaction u/s 153C of the Act to make a reassessment of income u/s 153A of the Act even for an extended assessment year after 31/03/2017. 86. During the course of hearing of this appeal, the above facts were not at all disputed by the CIT DR, because the CIT (A) has mentioned those very explicitly in his appellate order. It has also been observed that when an amendment in the section 153C of the Act was made by the law makers therein w.e.f. 01/06/2015, 101 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani changing applicability of the provisions of the said section, no simultaneous corresponding amendment in any manner was made u/s 153A of the Act. It has also been noted that whenever amendments were made in the section 153C of the Act on other occasions, then simultaneous amendments were also made u/s 153A of the Act to make applicability of the both the provisions harmonious for the period to which these two non-obstante sections applied. For example, in the years 2003 and 2017, substantial amendments were made in the search assessment provisions and applicability of dates of those amendments were specifically inserted therein for the searches conducted after 31/05/2003 and 31/03/2017 respectively. 87. However, while amending the provisions of the section 153C of the Act applicable w.e.f. 01/06/2015 there was no reference at all that the same is to be applied only in respect of the searches conducted after 31/05/2015 as has been specifically provided therein by the legislature on two other occasions as above. Thus, the provisions of the section 153C of the Act have to be seen by the AO as on the date when he receives the material from the AO of the 102 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani person searched may be at any date and then apply accordingly. Therefore, it is also held that application of the provisions of the section 153C of the Act will be compulsory for all the assessment years extendable up to 10 years in the case of a non-searched person as is compulsorily for the assessee searched till 31/03/2021, even for the searches conducted prior to 01/06/2015 where the AO of the person not searched receives the alleged incriminating information after 31/5/2015. 88. However, in the case of a person not searched, the AO is permitted to issue the said notice u/s 153C r.w.s. 153A of the Act, only for the assessment year for which any definite incriminating information was found during the course of search for any of the preceding 6 assessment years. But for the extended 4 relevant assessment years therein, the said notice u/s 153C of the Act can be issued only when the incriminating material points escapement of income backed by an undisclosed asset of Rs 50 lakh and above and the said incriminating may not be the seized material in physical form belonging / pertaining to the assessee not searched. 103 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani 89. Further, since the section 153C of the Act begins with a non- obstante wording overriding the application of the sections 147/148/149/151 of the Act, the AO is legally bound to take recourse to section 153C of the Act only in case of receipt of any information about any undisclosed income in any material found/ seized during the course of search in the premises of some other assessee. This is a jurisdictional fact which needs to be strictly adhered to and any lapse on jurisdictional issue cannot validate the action. 90. Even for the sake of argument, we do not go by the proposition that no such intimation can be passed on or given by the Investigation Unit of the income-tax department to the AO of the person not searched as the sole domain for remitting the said information to the said AO is only with the AO of the person searched as discussed above in terms of section 13(9A); but then also, if the information has otherwise been received by the AO of the person not searched from the Investigation Unit or any other AO which has come into the knowledge of the Revenue in a search conducted, then in that case, the only course available to the AO of 104 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani the person not searched is to take recourse to the provisions of the section 153C of the Act for any assessment or reassessment of the said amount. Any proceedings initiated based on the said information u/s 148 of the Act cannot be held to be legal as it will be beyond the codified provisions of the law. Because, the legislature has mandated assumption of jurisdiction in such cases to assess or reassess any alleged undisclosed income found during the course of search anywhere under section 153C of the Act, by carving out non-obstante clause for applicability of section 147 and other sections. 91. We have already observed in our earlier paragraphs that the entire procedure to make an assessment or reassessment of income of the alleged escaped income either u/s 148 or section 153C of the Act practically is the same except the jurisdiction and root cause which are different. The legislature has specifically carved out scope of assessment / reassessment of income of a person not searched of such alleged escaped income based on some incriminating information found during a search on some other person searched by taking recourse to the section 153C of the Act. The AO has not 105 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani been empowered to extend the scope of an assessment/ reassessment u/s 153A read with the section 153C of the Act beyond the alleged incriminating material found during the course of search in the case of some other person, because assessment / reassessment in such case is specifically restricted to the income based on the said incriminating information only. Whereas, in the proceedings initiated u/s 148 of the Act, the AO may extend the scope of the assessment / reassessment on other amounts also if any information about those is on his record over and above the alleged escaped income as per the reasons recorded. The purpose of restriction of assessment for amount of income by taking recourse to the provisions u/s 153C of the Act to alleged incriminating material and not on suspicion has been upheld by the Hon‟ble Supreme Court in the case of Sinhgad Technical Education Society (supra). 92. Accordingly, we hold that any incriminating information of any undisclosed income of the person not searched which was found during the course of a search having taken place up to 31/03/2021 on some other assessee, can only be taken into consideration for an 106 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani assessment / reassessment in the hands of the said person not searched through the domain of the section 153C of the Act. Thus, any assessment / reassessment proceedings-initiated u/s 148 of the Act in respect of the said incriminating information found during the course of a search up to 31/03/2021 on some other assessee is illegal and is ab initio as the same can be considered only by taking recourse to the provisions of the section 153C r.w.s. 153A of the Act. Thus, the assessment of the said amount of LTCG, which was claimed to be exempt u/s 10(38) of the Act by the assessee, made u/s 147 of the Act is beyond the scope of section 147, albeit it can be roped in only u/s 153C. 93. If on overall appreciation of the scheme of assessment / reassessment of income after the income-tax searches on the assessee searched and also for the persons not searched based on detection of some incriminating information during the said searches conducted upto 31/03/2021, the following legal course of action is open for the AOs, which can be summed up, in the following manner: 107 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani (i) It is mandatory for the AO of the person searched to make an assessment / reassessment of income of the said assessee u/s 153A of the Act for the 6 assessment years prior to the date of search and also for the extended 4 relevant assessment years, subject to fulfillment of the prescribed conditions for the same, on the basis of an income-tax search conducted on him. (ii) However, in the assessment / reassessment orders passed within the scope of section 153A of the Act, the AO cannot consider any undisclosed income detected by way of an incriminating information pertaining / relating to the said assessee, during an income-tax search conducted in the premises of some other assessee(s), even conducted at the same time or in some connected matter. In such a case where AO gets any information or material about any assessee from the search of some other person, he can, make assessment of the undisclosed income/ amount emanating from such information or material for the assessment / re assessment vide separate assessment / reassessment orders to be passed u/s 153A by taking recourse to the provisions of the section 153C of the Act. Because the cause of action for the said incriminating information for different 108 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani amounts had originated in different search(es) in the different premises of other assessees and for the same, the mandatory route legislated u/s 153C of the Act must be followed. (iii) Further, an assessee can also be assessed multiple times u/s 153C r.w.s 153A of the Act, despite having already been assessed u/s 153A of Act on the basis of an income-tax search in his premises, where the incriminating information has been received u/s 153C of the Act by the AOs of the searched person as well as of the person not searched, which information originates in different searches at different times on different persons as well. 94. Thus, here in this case as held above, the assessment order passed u/s 147 is beyond the jurisdiction as correct course for framing reassessment as per statute was u/s 153A and u/s 153C only. Ergo, on all the above legal grounds and issues raised by the assessee here are the jurisdictional issue and goes to the threshold of the validity of the assessment proceedings, which in our opinion has not been validly assumed. If the jurisdiction has not been correctly assumed, then the entire consequent assessment proceedings also become illegal. Accordingly, the assessee succeeds 109 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani here on the above two legal issues / pleas raised by him resulting into cancellation of the assessment order in this appeal. 95. In conclusion, we hold that the assessment order passed u/s 147 of the Act on 30/12/2018 is illegal and void ab initio and same is hereby quashed, having been passed on incorrect provision, ignoring the mandatory non-obstante sections 153A / 153C of the Act, as here in this case, jurisdiction to assess and pass the assessment order was under sections 153A / 153C. Since, the assessment order has been quashed; the grounds of appeal of the assessee on merits are not being adjudicated as they have become academic. Orders pronounced in the open court on 28 th February, 2023. Sd/- Sd/- (Amarjit Singh) (Amit Shukla) Accountant Member Judicial Member मुंबई Mumbai;ददनांक Dated : 28.02.2023 Sr.PS-Dhananjay 110 I .T . A . No . 6 1 2/ M u m / 2 0 2 0 Mr. Nilesh Bharani आदेशकीप्रनिनिनिअग्रेनर्ि/Copy of the Order forwarded to : 1. अपीलाथी/ The Appellant 2. प्रत्यथी/ The Respondent 3. आयकरआयुक्त(अपील) / The CIT(A) 4. आयकरआयुक्त/ CIT- concerned 5. दवभागीयप्रदतदनदध, आयकरअपीलीयअदधकरण, मुंबई/ DR, ITAT, Mumbai 6. गार्डफाईल / Guard File आदेशधिुसधर/ BY ORDER, .उि/सहधयकिंजीकधर (Dy./Asstt.Registrar) आयकरअिीिीयअनर्करण, मुंबई/ ITAT, Mumbai